Question
At December 31, 2021, a company reported the following: Total sales for 2021: $520,000 Accounts receivable at Dec. 31, 2021: $170,000 Allowance for Doubtful Accounts
At December 31, 2021, a company reported the following:
Total sales for 2021: $520,000
Accounts receivable at Dec. 31, 2021: $170,000
Allowance for Doubtful Accounts at Dec. 31, 2021: $1,800 credit
The company uses the allowance method for recording its bad debts. Which of the following would be included in the adjusting journal entry to record the company's bad debt expense, assuming that the company estimates bad debts to be 1% of sales?
a. | DR Bad Debt Expense $3,400 CR Allowance for Doubtful Accounts $3,400 | |
b. | DR Allowance for Doubtful Accounts $1,700 CR Bad Debt Expense $1,700 | |
c. | DR Bad Debt Expense for $5,200 CR Allowance for Doubtful Accounts $5,200 | |
d. | DR Bad Debt Expense $7,000 CR Allowance for Doubtful Accounts $7,000 |
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